(indieWIRE: 08.05.02) — Complete with graphic sex, Special K overdoses, lost love, and a little Catholic redemption, Italian bad girl Asia Argento‘s directorial debut “Scarlet Diva” (opening at New York’s Cinema Village this Friday) is that rare cinematic oddity — somewhere between art and exploitation — which continues to draws a small, but devoted fan base in the United States. But how small and how devoted?

“It really depends on how you position the film,” says Carl Morano, of Media Blasters Releasing, a five-year-old anime video label that has recently ventured into theatrical distribution with Japanese and European horror films, and acquired “Scarlet Diva” earlier this year. “In each individual city, we have to show the film to exhibitors and we have to sell the picture.”

Exhibitors’ reactions to the outrageously violent or outlandishly sexy range from the excited to the fearful, Morano explains. Using Japanese shock-meister Takashi Miike‘s “Visitor Q” as example, Morano says, “They either want to book it sight unseen because of its reputation or they’re afraid to book it, terrified of the reaction.” Sometimes, Morano will use the controversial aura around a picture to sell it to more cities. “‘Visitor Q’ has a reputation of people walking out,” he says. “And this type of thing can actually help us get more theatrical bookings.”

But box-office figures, as reported by Variety, don’t exactly show mind-boggling attendance for such controversial titles: last year’s sex-and-splatter French flick “Baise-Moi” made $276,655 for micro-distrib FilmFixx; Takashi Miike’s “Audition” garnered $131,296 for Vitagraph Films in 2001; while earlier standouts like Palm Pictures‘ 1996 release of Mamoru Oshii‘s anime sci-fi “Ghost in the Shell” drew $515,905 and Peter Jackson‘s much-loved gore-fest “Dead Alive” made $242,623 for Trimark back in ’93.

Palm Pictures’ David Koh doesn’t put much stake in theatrical release for their more in-your-face titles (though the company will soon distribute Wai Ka-Fai and Johnnie To‘s HK action-pic “Fulltime Killer“). “It’s more to promote the DVD and drive those sales,” he admits. “The number of units moved in DVD and VHS is pretty substantial, so there’s a real audience there. Even studios are looking to mine Asian libraries,” he adds, referring to major companies like Miramax and Columbia TriStar buying over-the-top titles from Hong Kong, Japan, and other foreign countries for their lucrative straight-to-video markets.

Since Vitagraph’s modest U.S. release of Miike’s “Audition” last year, interest has grown for the Japanese auteur, but it’s not clear whether larger numbers are ready to visit theaters to see his unique brand of gruesome experimental cinema. Even in his native Japan, says Patrick Macias, author of “Tokyoscope: The Japanese Cult Film Companion,” most of Miike’s films are made for Japan’s direct-to-video market. “His films do seem as odd and as marginal as they do here,” explains Macias. “The average Japanese person has no idea who is he or what films he’s made, but Japanese film buffs love him just as much as his foreign counterparts.”

That’s why Media Blasters will distribute his arty ultra-violent S&M hitman thriller “Ichi the Killer” early next year, and this Friday, New York’s Anthology Film Archives will unspool two earlier works: “The City of Lost Souls,” called by one critic “a punk ‘Bonnie and Clyde‘ centered in the Portuguese-speaking barrios of Tokyo,” and the totally outlandish “The Happiness of the Katakuris,” a musical about a family who run a mountain inn and chop up the bodies of their dead guests for fear of being discovered.

“I think the audience is changing somewhat, looking less for outre sex and violence and more for well-made movies that they’re not getting from Hollywood and the arthouse scene,” says Subway Cinema‘s Grady Hendrix, who helped organize the Miike program at Anthology. Aside from the Miike brand, Hendrix says the more extreme work is drawing less attention than mainstream blockbusters from abroad, like Korea’s recent “My Sassy Girl.” “Cheap and dirty movies are falling out of fashion,” he says. “It’s just really expensive to go to the movies. Who wants to blow $10 on killer lesbians?”

So while theatrical viability remains tenuous, many exploitation films make it to U.S. shores through imported DVDs and bootleg videos long before they find a release. “I was content having the movie in Kim’s Video in New York,” Asia Argento told indieWIRE during a recent visit to New York. “When I heard they had a copy of the movie for like two years now, I thought, ‘That was good enough.'”

According to Morano, there is a large market for parallel imports (technically illegal) and bootleg DVDs. Although they compete directly with his business, Morano says the trading and selling of entertainment contraband helps generate a growing fan base, and proves that there is a strong demand for these types of films. “It feeds the audience,” he says. “And people still want to see these movies on the big screen.”

“Look at Jackie Chan, Jet Li, and John Woo,” Hendrix says. “There was a huge fan base before they became mainstream names, with people trading tapes, making bootlegs, distributing illegal versions. I’d say 50 percent of the audience had seen the movies before, and they want to see them on the big screen and they want to bring a date.”